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REMARKS BY MAYOR TOM MURPHY FOLLOWING PASSAGE OF HISTORIC TAX REFORM FOR PITTSBURGH November 22, 2004 I want to take a minute to explain why the legislation just passed in Harrisburg is such an important and historic accomplishment for Pittsburgh. As all of you know, over the years, the old tax structure of Pittsburgh filled up with more and more loopholes so that in recent years, 24 of the 27 largest businesses in Pittsburgh paid almost no business taxes. Our City also received no meaningful help to pay the bills from the nearly 250,000 people who come into the City each day to work, to study or to enjoy our cultural and other attractions. What this has meant, is that our small businesses and our homeowners have paid almost the entire bill for running this City. So let’s take a moment, and understand what these new laws do. First, all for-profit businesses will now contribute to the City’s bottom line. No more exemptions for the big guys, while the little guys carry the load. Everyone will pay a share under the new payroll tax authorized in HB 197. Additionally, for the first time since 1965, the tens of thousands of workers who come to our City everyday will contribute $1 a week to help offset the costs of the police, fire, and paramedic services we provide and to maintaining our roadways. Their contributions will go directly to pay for services they utilize each day. And I’d like to take just a minute to offer my thanks to the General Assembly for ensuring help for all Pennsylvania communities by enacting this increase in the Occupation Tax statewide. Now all municipalities, many of whom have struggled to balance their budget for many years, have the help they need as well. From Erie to Franklin to Monroeville to Scranton to York, this legislation offers significant benefits to Pennsylvania cities. I am convinced that this reform and modernization of our tax structure was essential to position Pittsburgh to compete, to thrive and to grow in an increasingly interdependent, global marketplace. We are better positioned today than we have been in decades. For more than 20 years, Pittsburgh’s leaders have known that the so-called Business Privilege Tax is anti-jobs and anti-growth. As a tax on a businesses gross receipts, it has discouraged small and entrepreneurial start-ups from locating here and discouraged business expansion. House Bill 197 permits us to immediately reduce the BP by two thirds and get rid of it entirely within three years. Many will question whether this legislation goes far enough, or if it fully resolves the City’s fiscal crisis. The answer is that it does not go far enough. And it does not fully resolve our financial crisis. While we have achieved much of the structural tax modernization that we needed, there is much that still remains to be done. But the legislative process is one of compromise. We did not accomplish all of our goals. I had personally hoped that we would have been able to generate enough revenue to begin reducing the parking tax immediately. Also, I had hoped that we could have reformed our badly distressed pension system. I know and understand that there is still work to be done, and we will continue our efforts in the coming new year. However, what we achieved through this legislation is historic for Pittsburgh. We have much to be proud of and much to be thankful for. And I have a long list of people to thank. First and foremost, I believe that our success in Harrisburg was made possible by the leadership of the Intergovernmental Cooperation Authority. Without the ICA’s efforts, we would not have succeeded in reforming our tax structure. It is no secret that my relationship with the members of the ICA was rocky at the start, to be sure. But by coming together and putting the best interests of Pittsburgh first, we developed a strong working partnership. I thank Bill Lieberman for his perseverance, his leadership and his friendship. Each of the members of the ICA are to be commended for their hard work and willingness to fight for true reform for Pittsburgh. From the state, there are simply too many people to mention everyone. Our Governor, Ed Rendell was a stalwart partner for this City. I must thank each member of the City delegation who have fought alongside me for the past several years for their unwavering desire to help Pittsburgh succeed. I want to particularly thank Senator Jay Costa and Representatives Dan Frankel, Jake Wheatley and Harry Readshaw. Each of them went above and beyond the call of duty for our City. The Democratic House Leadership, Representative Mike Veon and Bill DeWeese, who together jumpstarted the debate last week by introducing the full ICA report as legislation. Their leadership in passing tax reform for Pittsburgh was simply invaluable. House Speaker John Perzel was instrumental in moving this process forward. To every legislator who voted in the affirmative for the Pittsburgh package, whether Republican or Democrat, friend or foe, I thank you for giving Pittsburgh the tools we need to succeed. To those who voted in the negative, I thank you for working with us, for listening to our case for assistance, and I hope that we can work together in the future to address the needs of our communities. I want to thank the business leaders in our community, particularly the Allegheny Conference as well as David Matter, David Malone, Art Rooney, Marty McGuin, Elsie Hillman, David Roderick and Barbara McNees for their unwavering commitment to resolving Pittsburgh’s fiscal crisis. To City Council members, I know that the road to reform has been a long and arduous one. But, together, we have done it. I thank each member of Council for their efforts both here at home, and for their efforts in Harrisburg. Your trip was well timed and well worth it. We have been given the keys to the future of Pittsburgh. Yet we still have much work to do here at home. We cannot walk away from our responsibility to implement the difficult but very necessary cuts in our budget. We must act swiftly and decisively to enact all of the Act 47 ordinance changes and contractual obligations. Without these cuts and new efficiencies, all that we have achieved in Harrisburg is worthless. We must have the cuts before we can implement the new revenues. We cannot have one without the other. Finally, I want to thank the citizens of Pittsburgh. I know that the last three years of debate about Pittsburgh’s finances have been difficult for our community. There have been many difficult and dark moments for all of us, but the fight for tax reform was worth the cost. I thank the citizens of Pittsburgh for their patience and understanding throughout this struggle. I know, as lifelong resident of this great City, that Pittsburgh is a resilient City. No matter how difficult this has been, we have overcome this challenge together. And now Pittsburgh’s best days lie ahead. We have accomplished a great deal, and together, we can be proud of how we have positioned Pittsburgh for the future. Our great City is poised for the future. I look forward to sharing it with each of you. Thank you. Tom Murphy Mayor